Why I Renewed My Earthquake Insurance (It's California, Folks)

In the "You don't say?" file, the U.S. Geological Survey is predicting that California has a "99.7 percent chance" of getting hit by an earthquake of magnitude 6.7 or worse in the next 30 years. This information is used by insurance companies in setting earthquake policy rates.

The last time we had a 6.7 quake was in Northridge in 1994. Five years before that, in 1989, San Francisco had a 7.1 quake. And 18 years before that, in 1971, there was a 6.6 quake in the San Fernando Valley.

Plus there were a couple of 7-pointers in more remote areas over that period of time. Big quakes happen in California. The USGS says, though, that this is the first time it's making a prediction using "newly available data." But predicting a big quake over the next 30 years is like predicting that Fake Jane will get more Botox. It's a given. That's why earthquake insurance is so expensive--eventually there will be claims. Big claims. My earthquake policy is the most expensive insurance I own.

You see, quake damage is not covered by a regular homeowner's policy, so you have to buy it just in case. Plus, it has a really high deductible, in some cases as much as 15 percent of the value of the home (meaning that in a state where homes average $500,000, the first $75,000 in damages is on you).

So you really only buy earthquake insurance to protect against a complete loss. Back in 1994, after the aftershocks from the Northridge quake settled down, we cancelled our earthquake policy, figuring we were pretty safe for a while. We started it back up two years ago, because, well, quakes happen.